UNIT 1

INTRODUCTION
• International Human Resource Management (IHRM) can be defined
as a set of activities targeting human resource management at the
international level. It strives to meet organizational objectives and
achieve competitive advantage over competitors at national and
international level.
• IHRM comprises of typical HRM functions such as recruitment,
selection, training and development, performance appraisal and
dismissal done at the international level and additional exercises such
as global skills management, expatriate management and so on.
INTRODUCTION
IHRM is concerned with handling the human resources at Multinational Companies
(MNCs) and it includes managing three types of employees −
• Home country employees: Employees residing in the home country of the company
where the corporate head quarter is situated, for example, an Indian working in India
for some company whose headquarters are in India itself.
• Host country employees: Employees residing in the nation in which the subsidiary is
located, for example, an Indian working as an NRI in some foreign country.
• Third country employees: These are the employees who are not from home country
or host country but are employed at the additional or corporate headquarters.
• For example, an Indian MNC, which has its corporate office in America, may employ a
French person as the CEO to the subsidiary. The Frenchman employed is a third
country employee.
• An expatriate is an employee who is working and temporarily residing
in a foreign country. Many firms prefer to call such employees
‘international assignees’.
• TCNs are also expatriates, as are HCNs who are transferred into
parent country operations outside their own home country.
• The term inpatriate has come into vogue to signify the transfer of
subsidiary staff into the parent country (headquarters) operations
According to Hugh Scullion,
International HRM (IHRM) involves the HRM issues and problems
arising from the internationalisation of business, and the HRM
strategies, policies and practices which firms pursue in response to the
internationalisation of business.
DOMESTIC VS IHRM
There are many similarities between HRM at the national as well as international
level. However, let us have a look at the differences between them with the help
of points given below −
• Domestic HRM takes place at the national level, that is, within a country and
IHRM takes place at the international level, that is, in between two or more
than two countries.
• Domestic HRM is bothered about managing employees belonging to one
nation and IHRM is bothered about managing employees belonging the home
country and host country as well as third country employees.
• Domestic HRM is concerned with managing limited number of HRM activities
at the national level and IHRM is concerned with managing additional activities
such as expatriate management.
• Domestic HRM is less complicated due to less imprint from the external
environment. IHRM is comparatively more complicated, as it is deeply affected
by the external factors such as cultural distance and institutional factors.
DOMESTIC VS IHRM
 More HR activities: taxation, culture orientation, administrative
services
 The need for a broader perspective: cater to multiple needs
 More involvement in employees’ personal lives: adjustment, spouses,
children
 Changes in emphasis as the workforce mix of expatriates and locals
varies: fairness
 Risk exposure: expatriate failure, terrorism
 Broader external influences: government regulations, ways of conduct
SOME IMPORTANT TERMS
• Host Country National (HCN): Belongs to the Country where the
subsidiary is located
• Parent Country National (PCN): Belongs to the Country where the firm
has its headquarters
• Third Country Nationals (TCN): Belongs to any other country and is
employed by the firm
EXPATRIATES
 An employee who is working and temporarily residing in a
foreign country
• Some firms prefer to use the term “international assignees”
• Expatriates are PCNs from the parent country operations, TCNs
transferred to either HQ or another subsidiary, and HCNs transferred
into the parent country
RISK ASSOCIATED WITH IHRM
1. Expatriate failure (the premature return of an expatriate from an
international assignment)
2. Under-performance while on international assignment
3. The direct costs of failure (salary, training costs, travel costs and
relocation expenses) to the parent firm may be as high as three times
the domestic salary plus relocation expenses, depending on currency
exchange rates and location of assignments.
4. Terrorism both for inpatriates and expatriates
5. Major epidemic or pandemic crises (like SARS, Avian Flu, Corona Virus
etc)
MULTIDOMESTIC STRATEGY
• Companies with a multidomestic strategy have as aim to meet the
needs and requirements of the local markets worldwide by
customizing and tailoring their products and services extensively.
• In addition, they have little pressure for global integration.
Consequently, multidomestic firms often have a very decentralized
and loosely coupled structure where subsidiaries worldwide are
operating relatively autonomously and independent from the
headquarter.
• A great example of a multidomestic company is Nestlé. Nestlé uses a
unique marketing and sales approach for each of the markets in
which it operates. Furthermore, it adapts its products to local tastes
by offering different products in different markets.
Global Strategy: High Integration and Low Responsiveness

• Global companies are the opposite of multidomestic companies. They

offer a standarized product worldwide and have the goal to maximize
efficiencies in order to reduce costs as much as possible.
• Global companies are highly centralized and subsidiaries are often
very dependent on the HQ. Their main role is to implement the
parent company’s decisions and to act as pipelines of products and
strategies.
• This model is also known as the hub-and-spoke model.
Pharmaceutical companies such as Pfizer can be considered global
companies.
Transnational: High Integration and High Responsiveness
• The transnational company has characteristics of both the global and
multidomestic firm. Its aim is to maximize local responsiveness but also to
gain benefits from global integration.
• Even though this seems impossible, it is actually perfectly doable when taking
the whole value chain into considerations.
• Transnational companies often try to create economies of scale more
upstream in the value chain and be more flexible and locally adaptive in
downstream activities such as marketing and sales.
• In terms of organizational design, a transnational company is characterised by
an integrated and interdependent network of subsidiaries all over the world.
These subsidiaries have strategic roles and act as centres of excellence.
• Due to efficient knowledge and expertise exchange between subsidiaries, the
company in general is able to meet both strategic objectives. A great example
of a transnational company is Unilever
 International Strategy: Low Integration and Low Responsiveness
• An international company therefore has little need for local adaption and
global integration.
• The majority of the value chain activities will be maintained at the
headquarter. This strategy is also often referred to as an exporting strategy.
• Products are produced in the company’s home country and send to customers
all over the world. Subsidiaries, if any, are functioning in this case more like
local channels through which the products are being sold to the end-
consumer.
• Large wine producers from countries such as France and Italy are great
examples of international companies.
 Organizational structure and HRM
1. The organizational structure should be set as the result of the HR
Management Goals and the defined HR Model. 
2. The HR Organization defines clear boundaries around HR Processes. The
Compensation and Benefits unit should be clearly about the compensation
of employees and building different compensation strategies. 
3. Each organizational structure restricts the free flow of information. The
clear communication channels should be designed as all HR employees
know information significant for their job. Many HR Functions do suffer
from the insufficient information.
4. The HR Organizational Structure should be as flat as possible.
The decision making responsibility should be given to the lowest levels of
the HR Organization.
5. The organizational structure has to be flexible. The priorities of the
organization should change quickly and the reaction is needed.
INTERNATIONAL HRM PLANNING
• 1. Ethnocentric Approach
According to ethnocentric approach, organizations believe that the
employees of home country nationals can perform better to fulfill the
organization’s mission, vision, and objectives, so all the key managerial
positions of the subsidiary are filled with expatriates from the home
country.
BENEFITS OF ETHONOCENTRIC
APPROACH
• Organization’s culture can be easily adapted to all the subsidiaries with
the help of key managerial decisions such as vision, mission, and
objectives.
• Possible to eliminate communication barriers between the
headquarters and subsidiaries.
• Proper control is possible with the ethnocentric approach.
• The parent company can monitor the operations of the subsidiaries
effectively.
• Better coordination of activities between the parent company and
subsidiary are possible.
DISADVANTAGE OF ETHONOCENTRIC
APPROACH
• Need to pay more for the expatriates from the home country.
• Cross-cultural variations may lead to clashes between the various levels
of the employees.
• Host country national employees may get disappointed by losing the
key managerial roles.
• The subsidiary may lose skilled and experienced employees due to the
ethnocentric approach.
• Expatriates from the home country may not aware of the local values
and beliefs, so cultural clashes may arise and may show an effect on the
business.
2. POLYCENTRIC APPROACH
In polycentric approach, all the key managerial positions are filled with
the employees of the host country nationals.
Many companies are adopting this approach because they believe that
host country nationals can help in fulfilling the objectives of the
organizations with a better understanding of the local culture, beliefs,
and values.
Here subsidiary is given freedom to take decisions and formulate
strategies according to the local business environment and vision and
mission of the headquarters.
BENEFITS OF POLYCENTRIC
APPROACH
• Host country managers can analyze and understand the local markets and
local people
• Better coordination with the business environment is possible, both
internal and external.
• No difficulty arises due to cultural issues.
• It creates job satisfaction and job enrichment to the host country
nationals.
• Hiring host country nationals is less expensive than hiring expatriates.
• Local market knowledge of the host country nationals enables them to
take strategic decisions
DISADVANTAGE OF POLYCENTRIC
APPROACH
• It may not always create a scope of better coordination between
headquarters and subsidiaries.
• Quick control of operations is not possible because of the key
managerial positions are occupied by the host country nationals.
• Though the host country managers follow the vision and mission of
the organization, then also errors may occur in the fulfillment of the
standards of organization culture.
3. GEOCENTRIC APPROACH
According to geocentric approach, organizations hire neither the home
country nationals nor the host country nationals preferably.
They recruit employees on the basis of the concept right person for the
right job.
Here organizations hire right persons or suitable employees for the
effective running of the business operations, irrespective of the
nationality. Geocentric approach facilitates competitive advantage by
hiring most talented and eligible people.
ADVANTAGE OF GEOCENTRIC
APPROACH
• The geocentric approach creates a scope to hire world’s best talented
and skilled employees.
• It facilitates competitive advantage and helps in reaching the market
empire position.
• Hiring most talented and eligible people can fulfill the objectives of
the organization effectively.
• This approach helps in reducing the unfair treatments and clashes in
the organization due to the favoritism towards nationality.
DISADVANTAGE OF GEOCENTRIC
APPROACH
• Hiring according to geocentric approach is expensive.
• Chance of cross-cultural clashes become high
• It may not always facilitate better coordination and control of the
operations of the organization.
• Difficult to monitor and control the operations
• Organizations need to spend more on expatriate relocation allowance.
• High cross-cultural variations arise.
UNIT 2
INTERNATIONAL STAFFING
• Types of International Employees
International employees can be placed in three different classifications. 
• An expatriate is an employee working in a unit or plant who is not a citizen of the country in which
the unit or plant is located but is a citizen of the country in which the organization is headquartered.
• A host-country national is an employee working in a unit or plant who is a citizen of the country in
which the unit or plant is located, but where the unit or plant is operated by an organization
headquartered in another country.
• A third-country national is a citizen of one country, working in a second country, and employed by
an organization headquartered in a third country. Each of these individuals presents some unique HR
management challenges. Because in a given situation each is a citizen of a different country, different
tax laws and other factors apply. HR professionals have to be knowledgeable about the laws and
customs of each country. They must establish appropriate payroll and record-keeping procedures,
among other activities, to ensure compliance with varying regulations and requirements.
EXPATRIATES 
An expatriate (in abbreviated form, expat) is a person temporarily or
permanently residing in a country and culture other than that of the
person’s upbringing.)
A person who leave one’s native country to live elsewhere
Many MNEs use expatriates to ensure that foreign operations are linked
effectively with the parent corporations.
Generally, expatriates also are used to develop international capabilities
within an organization. Experienced expatriates can provide a pool of talent
that can be tapped as the organization expands its operations more broadly
into even more countries. Japanese-owned firms with operations in the
United States have rotated Japanese managers through U.S. operations in
order to expand the knowledge of U.S. business practices in the Japanese
firms.
Volunteer expatriates: 
• These are persons who want to work abroad for a period of time
because of career or self-development interests. Often, these
expatriates volunteer for shorter-term assignments of less than a year
so that they can experience other cultures and travel to desired parts
of the world.
Traditional expatriates: 
• These are professionals and managers assigned to work in foreign
operations for one to three years. They then rotate back to the parent
corporation in the home country.
Career development expatriates
• These individuals are placed in foreign jobs to develop the
international management capabilities of the firm. They may serve
one to three “tours” in different countries, so that they can develop a
broader understanding of international operations.
Global expatriates: 
• The broadcast category comprises those individuals who move from
one country to another. Often, they prefer to work internationally
rather than in the home country.
TRANSNATIONAL PROJECT TEAMS 
•
There has been a dramatic increase in the number and variety of multicultural or
“transnational” teams. These teams may be temporary or somewhat permanent
and are formed to solve a specific problem or to handle ongoing activities.
• They often include headquarters representatives, host-country nationals, and
third-country nationals. They are useful not only as potentially valuable business
units but also as development vehicles for leaders.
• Eastman Kodak formed a transnational team based in London to launch its photo
CD at the same time in several European countries. The team dealt with complex
strategic issues across geographic and cultural barriers.
GLOBAL COMPENSATION
• Companies with multinational operations need to develop
compensation plans for employees that are in line with their global
business strategy.
• Companies that articulate a clear global pay philosophy and develop
corresponding compensation programs are best positioned to
effectively execute their strategy.
• An effective global compensation strategy creates consistency in pay
management and facilitates global employee mobility.
COMPENSATION ELEMENTS
• Base pay
Companies take one of the following approaches to establish base
salaries for expatriates:
1. The home-country-based approach. The objective of a home-based
compensation program is to equalize the employee to a standard of
living enjoyed in his or her home country. The 2016 Cartus Global
Mobility Policy & Practices Survey found that 76 percent of long-term
assignments and 75 percent of short-term assignments use a home
country pay structure.1 Under this system, the employee's base salary is
broken down into four general categories: taxes, housing, goods and
services, and discretionary income
2. The host-country-based approach. With this approach,
the expatriate employee's compensation is based on local
national rates. Many companies continue to cover the
employee in its defined contribution or defined benefit
pension schemes and provide housing allowances.
Only 14 percent of long-term assignments and 5 percent
of short-term assignments base pay on local rates,
according to the Cartus survey.
3. The headquarters-based approach. This approach
assumes that all assignees, regardless of location, are
in one country (i.e., a U.S. company pays all assignees
a U.S.-based salary, regardless of geography).
Cartus found that a small percentage of companies
use headquarters-based approaches for long-term
assignments (4 percent) and short-term assignments
(5 percent)
Balance sheet approach. In this scenario, the compensation is calculated
using the home-country-based approach with all allowances, deductions
and reimbursements. After the net salary has been determined, it is then
converted to the host country's currency. Since one of the primary goals
of an international compensation management program is to maintain
the expatriate's current standard of living, developing an equitable and
functional compensation plan that combines balance and flexibility is
extremely challenging for multinational companies. To this end, many
companies adopt a balance sheet approach. This approach guarantees
that employees in international assignments maintain the same standard
of living they enjoyed in their home country. A worksheet lists the costs
of major expenses in the home and host countries, and any differences
are used to increase or decrease the compensation to keep it in balance.
Variable/incentive compensation

• The globalization of business has increased the use of variable and

incentive pay around the world.
• But some cultures do not readily accept the practice of linking pay to
individual or group performance.
• Other roadblocks to pay for performance include financial (not
enough funding of the pool), target setting (defining performance
parameters) and pay equity. Yet when it is done right, pay for
performance effectively allocates limited rewards and retains top
performers.
• As such, variable pay has become an increasingly important
compensation element in many countries
Premiums and allowances

• Premiums and allowances are added to the base salary so expatriate

employees can maintain their standard of living. Those add-ons are
removed when the employee repatriates. Some types of premiums
and allowances are as follows:
Hardship and hazard/danger pay. Employers sometimes need to send
employees on assignments to host countries where conditions are
difficult or hazardous (i.e., remote locations or countries with high rates
of violence). As a result, a hardship allowance may be granted as an
additional incentive to compensate employees for accepting
assignments in less-than-desirable countries.
Premiums typically range from 10 percent to 50 percent of base pay,
depending on the severity of the hardship. For assignments in
developing countries that have a history of violence or are experiencing
political unrest, expatriates often receive some form of hazard pay, such
as an additional 25 percent of their base salary.
Cost-of-living adjustments. A cost-of-living adjustment is an increase or
decrease of an expatriate employee's pay in response to fluctuations in
the economy, such as inflation or deflation.
To prevent attrition of the global employee's purchasing power,
companies often raise the employee's base salary to keep up with
inflation. When price levels drop, companies may also decrease the
base salary accordingly.
Educational assistance. Educational assistance for dependents of expatriate
employees varies based on conditions in the host country. Assistance is
usually not provided if local educational institutions are deemed adequate.
When the educational system of the host country is substandard, employers
may use a variety of benefits, such as employers operating a school in the
foreign country; paying for dependents' educational expenses, including room
and board, to attend schools in the United States; or providing an allowance
for attendance at private schools in either the United States or the host
country. Other employers may simply choose to pay employees a specified
amount (stipend) considered necessary for schooling at the nearest adequate
school, and the employees make up any difference to send their dependents
to an institution of their choice.
Housing assistance. Assistance for housing is usually provided either in
the form of free company-owned housing or via a housing allowance
that is typically equal to the difference in housing costs between the
home and host countries or based on a specified percentage of an
employee's base salary.
Housing allowance rates are usually calculated based on either a single
person or a two-person household. For employees with larger families
living with them, employers may provide an additional supplement,
typically ranging from 10 percent to 30 percent of the two-person
allowance
Home leave. The objective of home leave policies is to give the assignee and his or her
family the opportunity to maintain personal and business relationships and remain
abreast of any economic, political, social or cultural changes in the home country.
Although home leave policies vary among multinational corporations, most policies
grant leave based on the employee's level within the organizational structure.
Executives, managers and more senior-level professionals are most often granted home
leave once a year, or once every other year for a duration of up to four weeks, and
lower-level employees may be allowed only a single visit during the course of their
assignment. Companies that provide home leave allowances generally purchase or
reimburse the employee for any travel-related expenses, such as airline tickets for the
employee, spouse or partner and any dependent children younger than college age.
GLOBAL COMPENSATION STRATEGIES
1. THE GOING RATE APPROACH
2. BALANCE SHEET APPROACH
• The balance sheet approach to international compensation is a system
designed to equalize the purchasing power of employees at
comparable position levels living overseas and in the home-country
and to provide incentives to offset qualitative differences between
assignment locations
Local Plus APPROACH
• A Local Plus approach is one in which expatriate employees are paid
according to the prevailing salary levels, structure, and administration
guidelines of the host location, plus provided ‘expatriate type’
benefits such as assistance with transportation, housing, and
dependents’ education in recognitionof the employee’s ‘foreign’
status.
• In many respects, Local Plus compensation is a hybrid version of both
the Balance Sheet (home based) and Going Rate (host based)
Approaches, often containing the optimum benefits of both.
UNIT 3
• INTERNATIONAL INDUSTRIAL RELATIONS
Industrial relations policies and practices of multinational firms
• Because national differences in economic, political and legal systems produce
markedly different industrial relations systems across countries, MNEs generally
delegate the management of industrial relations to their foreign subsidiaries.
However, a policy of decentralization does not keep corporate headquarters
from exercising some coordination over industrial relations strategy.
• Generally, corporate headquarters will become involved in or oversee labor
agreements made by foreign subsidiaries because these agreements may affect
the international plans of the firm and/or create precedents for negotiations in
other countries.
 Factors that Influence Industrial Relations
Institutional factors: Home and host country government policy, labour legislation,
voluntary courts, collective agreement, employee courts, employers’ federations, social
institutions like community, caste, creed, system of power status etc. in various countries
form Institutional factors.
Economic factors: Include economic organisation, like capitalist, communist, mixed etc. ,
the structure of labour force, demand for and supply of labour force etc.
Technological factors: Include mechanisation, automation, rationalisation,
computerisation, information technology etc.
Social and Cultural factors: Include population, religion, customs and traditions of people,
ethnic groups, cultures of various groups of culture etc.
Political factors: Include political system in the country, political parties and their
ideologies, their growth, involvement in trade unions etc.
Governmental factors: Include host and home country governmental policies like
globalisation policies, industrial policy, economic policy, labour policy, export policy,
migration and immigration policies etc.
 INTERNATIONAL LABOUR
•STANDARDS
International labour standards refer to conventions agreed upon by
international parties, resulting from a series of value judgments, set forth to
protect basic worker rights, enhance workers’ job security, and improve their
terms of employment on a global scale.
• The intent of such standards, then, is to establish a worldwide minimum level
of protection from inhumane labour practices through the adoption and
implementation of said measures. From a theoretical standpoint, it has been
maintained, on ethical grounds, that there are certain basic human rights that
are universal to humankind.
• Thus, it is the aim of international labour standards to ensure the provision of
such rights in the workplace, such as against workplace aggression, bullying, 
discrimination and gender inequality on the other hands for working diversity, 
workplace democracy and empowerment.
•  The primary international agency charged with developing working standards
is the International Labour Organization (ILO)
 INTERNATIONAL LABOUR
•STANDARDS
According to the ILO, international labour standards contribute to the
possibility of lasting peace, help to mitigate potentially adverse effects of
international market competition and help the progress of 
international development.
• International labour standards are legal instruments drawn up by the ILO's
constituents (governments, employers and workers) and setting out basic
principles and rights at work.
• They are either Conventions (or Protocols), which are legally binding
international treaties that may be ratified by member states,
or Recommendations, which serve as non-binding guidelines. In many
cases, a Convention lays down the basic principles to be implemented by
ratifying countries, while a related Recommendation supplements the
Convention by providing more detailed guidelines on how it could be
applied. Recommendations can also be autonomous, i.e. not linked to a
Convention.
BENEFITS OF LABOUR STANDARDS
1. A path to full and productive employment and decent work for all:
• International labour standards are first and foremost about the development of
people as human beings.
• In the Declaration of Philadelphia  (1944), the international community
recognized that “labour is not a commodity”.
• Labour is not an inanimate product, like an apple or a television set, that can be
negotiated for the highest profit or the lowest price. Work is part of everyone’s
daily life and is crucial to a person’s dignity, well-being and development as a
human being.
• Economic development should include the creation of jobs and working
conditions in which people can work in freedom, safety and dignity. In short,
economic development is not undertaken for its own sake, but to improve the
lives of human beings.
• International labour standards are there to ensure that it remains focused on
improving the life and dignity of men and women.
BENEFITS OF LABOUR STANDARDS
2. An international legal framework for fair and stable globalization
• Achieving the goal of decent work in the globalized economy requires
action at the international level.
• The world community is responding to this challenge in part by developing
international legal instruments on trade, finance, the environment, human
rights and labour.
• The ILO contributes to this legal framework by elaborating and promoting
international labour standards aimed at making sure that economic
growth and development go hand-in-hand with the creation of decent
work.
• The ILO’s unique tripartite structure ensures that these standards are
backed by governments, employers and workers alike. International
labour standards therefore lay down the basic minimum social standards
agreed upon by all the players in the global economy.
BENEFITS
3. A level playing field
OF LABOUR STANDARDS
• An international legal framework on social standards ensures a level playing
field in the global economy.
• It helps governments and employers to avoid the temptation of lowering labour
standards in the hope that this could give them a greater comparative
advantage in inter- national trade.
• In the long run, such practices do not benefit anyone. Lowering labour
standards can encourage the spread of low-wage, low-skill and high-turnover
industries and prevent a country from developing more stable high-skilled
employment, while at the same time slowing the economic growth of trade
partners.
• Because international labour standards are minimum standards adopted by
governments and the social partners, it is in everyone’s interest to see these
rules applied across the board, so that those who do not put them into practice
do not undermine the efforts of those who do.
BENEFITS OF LABOUR STANDARDS
4. A means of improving economic performance
• International labour standards have been sometimes perceived as
being costly and therefore hindering economic development.
• However, a growing body of research has indicated that compliance
with international labour standards is often accompanied by
improvements in productivity and economic performance.
BENEFITS OF LABOUR STANDARDS
5. A safety net in times of economic crisis
• Even fast-growing economies with high-skilled workers can experience
unforeseen economic downturns.
• The Asian financial crisis of 1997, the 2000 dot-com bubble burst and
the 2008 financial and economic crisis showed how decades of
economic growth can be undone by dramatic currency devaluations or
falling market prices.
• For instance, during the 1997 Asian crisis, as well as the 2008 crisis,
unemployment increased significantly in many of the countries affected.
The disastrous effects of these crises on workers were compounded by
the fact that in many of these countries social protection systems,
notably unemployment and health insurance, active labour market
policies and social dialogue were barely developed.
BENEFITS OF LABOUR STANDARDS
6. A strategy for reducing poverty
• Economic development has always depended on the acceptance of
rules. Legislation and functioning legal institutions ensure property
rights, the enforcement of contracts, respect for procedure and
protection from crime – all legal elements of good governance
without which no economy can operate.
• A market governed by a fair set of rules and institutions is more
efficient and brings benefit to everyone. The labour market is no
different.
• Fair labour practices set out in international labour standards and
applied through a national legal system ensure an efficient and stable
labour market for workers and employers alike.
FUNDAMENTAL CONVENTIONS OF
LABOUR STANDARDS
The ILO Governing Body has identified eight “fundamental”
Conventions:
1. Freedom of Association and Protection of the Right to Organise
Convention, 1948
2. Right to Organise and Collective Bargaining Convention, 1949
3. Forced Labour Convention, 1930 (and its 2014 Protocol )
4. Abolition of Forced Labour Convention, 1957
5. Minimum Age Convention, 1973
6. Worst Forms of Child Labour Convention, 1999 
7. Equal Remuneration Convention, 1951
8. Discrimination (Employment and Occupation) Convention, 1958
GOVERNANCE CONVENTIONS OF
LABOUR STANDARDS
4 CONVENTIONS:
1. Labour Inspection Convention, 1947
2. Employment Policy Convention, 1964
3. Labour Inspection (Agriculture) Convention, 1969
4. Tripartite Consultation (International Labour Standards) Convention,
1976
GLOBAL UNIONS
• Global Unions is the partnership between the International Trade
Union Confederation, Global Union Federations and the Trade Union
Advisory Committee to the OECD.
• Also known as Council of Global Unions (CGU)
Please visit the following:
http://www.global-unions.org/?lang=en
• The CGU was created to encourage closer co-operation among global
unions in order to act more effectively at the international level to build a
more favourable, enabling environment for organising and collective
bargaining. Although its work has policy implications, it was not
established to make policy. That is the responsibility of the organisations
that constitute the CGU.
REGIONAL INTEGRATION AND
FRAMEWORK AGREEMENTS
• Regional Integration is a process in which neighboring states enter
into an agreement in order to upgrade cooperation through common
institutions and rules.
• The objectives of the agreement could range from economic to
political to environmental, although it has typically taken the form of
a political economy initiative where commercial interests are the
focus for achieving broader socio-political and security objectives, as
defined by national governments.
• Regional integration has been organized either via supranational
institutional structures or through intergovernmental decision-
making, or a combination of both.
OBJECTIVES OF REGIONAL
INTEGRATION
• The strengthening of trade integration in the region
• The creation of an appropriate enabling environment for private sector
development
• The development of infrastructure programmes in support of economic
growth and regional integration
• The development of strong public sector institutions and good
governance
• The reduction of social exclusion and the development of an inclusive
civil society contribution to peace and security in the region
• The building of environment programmes at the regional level
• The strengthening of the region’s interaction with other regions of the
world.
UNIT 4
Equal opportunity and Diversity management in global context:
• Emerging from the USA during the late 1980s, the ‘diversity approach’ began
to be discussed as a means of providing both a business and social-justice
incentive to drive equality within organisations.
• Unlike equal opportunities approaches, which aim for workplaces where an
individual’s sex and race is of no significance, the core idea behind managing
diversity seems to be to encourage organizations to recognize differences.
• Managing diversity is generally seen as “proactively capitalizing on the
different skills, qualities and viewpoints that a diverse workforce has to offer”.
• Managing Diversity is about the realization of the potential of all employees
where certain group based equal opportunities need to be seriously
questioned, in particular affirmative action and targets.
Theories of Employment Discrimination
• 1. Disparate treatment
• Disparate treatment discrimination occurs when an employer
intentionally takes an employee’s protected status into consideration
when taking an adverse employment action, such as a termination or
layoff decision.
• An example of intentional discrimination is an employer that learns of
an employee’s pregnancy and, based at least in part on that
knowledge, selects the pregnant employee for layoff rather than a
less-qualified employee who is not pregnant.
WHAT IS WORKPLACE
DISCRIMINATION
• Discrimination occurs when someone is treated unfavorably because of a
certain attribute.
• Discrimination may involve some or all of the following:
1. Conduct that can be considered harassing, coercive or disruptive,
including sexual harassment
2. Making offensive ‘jokes’ about another worker’s clan, ethnic background,
colour, sex or disability
3. Expressing negative stereotypes about particular groups e.g. “married
women shouldn’t be working.”
4. Judging someone on their political or religious beliefs rather than their
workperformance.
5. Using selection processes based on irrelevant attributes such as ethnic or
clan group,age, sex or disability rather than on knowledge, skills and merit.
Theories of Employment Discrimination
2. Disparate impact
• Disparate impact discrimination, also known as adverse impact
discrimination, occurs when an employer adopts a policy or practice
that seems neutral and nondiscriminatory on its surface but has a
disproportionately negative effect on members of a protected class.
For example, Practices that have been found to have a disparate
impact on protected groups include:
• Minimum height requirements. These have been found to
disproportionately affect women, Hispanics and Asians.
• Physical agility tests. These can have a disparate impact on women.
• Clean-shaven requirements. These have been found to adversely
affect African-American men who are disproportionately affected by a
Theories of Employment Discrimination
3. Harassment
• Harassment is a form of disparate treatment (i.e., intentional) discrimination. The
theory has its roots in sexual harassment cases under Title VII of the US law, but courts
have applied the same reasoning to harassment on the basis of other protected
characteristics, such as race or religion. Sexual harassment can occur in two forms: by
the opposite sex or by the same sex.
• Quid pro quo harassment. This type of harassment involves unwelcome sexual
advances, requests for sexual favors, or other verbal or physical conduct of a sexual
nature when submission to such conduct is made either explicitly or implicitly a term or
condition of employment, or when submission to or rejection of such conduct by an
employee is used as the basis for employment decisions, including termination.
• Hostile environment harassment. A hostile work environment exists when conduct has
the purpose or effect of unreasonably interfering with an individual’s work performance
or creating  an intimidating, hostile or offensive work environment. For a hostile
environment to be unlawful, it must be so pervasive and severe that it effectively alters
the terms of employment. The environment must be such that a reasonable person
Theories of Employment Discrimination
4. Retaliation
• Most U.S. laws that prohibit employment discrimination also prohibit retaliation
against an employee because the employee has exercised rights under the statute
at issue.
• For example, Title VII of the Civil Rights Act of the US Constitution makes it illegal
for an employer to discriminate against an employee because that employee
opposed any discriminatory practice; made a charge of discrimination; or
testified, assisted or participated in any manner in an investigation, proceeding or
hearing. The individual employee who claims to be the victim of discrimination
can also claim to be the victim of retaliation for complaining about it.
• Lawsuits based on retaliation can be even more difficult for employers to defeat
than lawsuits based on direct discrimination. Employers must exercise caution not
to attempt, or appear to attempt, to “get even” when conducting disciplinary
terminations or layoffs in which the affected employees have participated in
protected activities.
 HOW TO PREVENT DISCRIMINATORY
PRACTICES
• Adopting an organizational philosophy that treats employees as individuals entitled to respect
and fair treatment, not as commodities.
• Establishing clear written policies and practices, and then sticking to them and creating
thorough documentation of human resource decisions.
• Emphasizing the employer’s EEO (Equal Employment Opportunity) values, policies and
procedures in new-employee onboarding and training.
• Providing ongoing training at all levels about the employer’s EEO values, policies and
procedures.
• Creating an EEO conflict resolution process that is truly open-door.
• Designating and empowering a responsible individual to address EEO issues: an ethics officer,
EEO officer, affirmative action officer, diversity officer, ombudsman or director of human
resources.
• Investigating employee complaints thoroughly and consistently.
 EQUAL EMPLOYMENT OPPORTUNITY
IN INDIA
• Article 15 of Indian Constitution mandates prohibition of discrimination
on grounds of religion, race, caste, sex or place of birth.
• Article 16 mandates equal opportunity in matters of public employment.
Article 16(2) further states that no citizen shall on grounds only of
religion, race, caste, sex, descent, place of birth, residence or any of
them, be ineligible for, or discriminated against in respect of, any
employment or office under the State.
MANAGING CULTURAL DIVERSITY AT
WORKPLACE
1. Communication: Providing information accurately and promptly is critical to
effective work and team performance. This is particularly important when a
project is troubled and needs immediate corrective actions. However, people
from different cultures vary in how, for example, they relate to bad news.
People from some Asian cultures are reluctant to give supervisors bad news
– while those from other cultures may exaggerate it.
2. Team-Building: Some cultures – like the United States – are individualistic,
and people want to go it alone. Other cultures value cooperation within or
among other teams. Team-building issues can become more problematic as
teams are comprised of people from a mix of these cultural types. Effective
cross-cultural team-building is essential to benefiting from the potential
advantages of cultural diversity in the workplace
MANAGING CULTURAL DIVERSITY AT
WORKPLACE
3. Time: Cultures differ in how they view time. For example, they differ in the balance
between work and family life, and the workplace mix between work and social behavior.
Other differences include the perception of overtime, or even the exact meaning of a
deadline. Different perceptions of time can cause a great misunderstanding and mishap in
the workplace, especially with scheduling and deadlines. Perceptions of time underscore the
importance of cultural diversity in the workplace, and how it can impact everyday work.
4. Schedules: Work can be impact by cultural and religious events affecting the workplace.
The business world generally runs on the western secular year, beginning with January 1 and
ending with December 31. But some cultures use wildly different calendars to
determine New Years or specific holy days. For example, Eastern Orthodox Christians
celebrate Christmas on a different day from western Christians. For Muslims, Friday is a day
for prayer. Jews observe holidays ranging from Rosh Hashanah to Yom Kippur. These
variations affect the workplace as people require time off to observe their holidays.
Structure of Global Organization

1 Expo-imp organization:
• Exports are often looked after by a company’s marketing or sales
department in the initial stages when the volume of exports sales is
low. However, with increase in exports turnover, an independent
exports department is often setup and separated from domestic
marketing, as shown in Fig
 Structure of Global Organization

2. International Division Structure:

As the foreign operations of a company grow, businesses often realize the
overseas growth opportunities and an independent international division is
created which handles all of a company’s international operations. The
head of international division, who directly reports to the chief executive
officer, coordinates and monitors all foreign activities.
 Structure of Global Organization

3. Global Functional Division Structure:

• It aims to focus the attention of key functions of a firm, wherein each
functional department or division is responsible for its activities around
the world. For instance, the operations department controls and
monitors all production and operational activities; similarly, marketing,
finance, and human resource divisions co-ordinate and control their
respective activities across the world.
 Structure of Global Organization

3. Global Functional Division Structure:

• It aims to focus the attention of key functions of a firm, wherein each
functional department or division is responsible for its activities around
the world. For instance, the operations department controls and
monitors all production and operational activities; similarly, marketing,
finance, and human resource divisions co-ordinate and control their
respective activities across the world.
 Structure of Global Organization

3. Global Functional Division Structure:

The Major Advantages of global functional division structure include:
• Greater emphasis on functional expertise
• Relatively lean managerial staff
• High level of centralized control
• Higher international orientation of all functional managers
The Disadvantages of such divisional structure include:
• Difficulty in cross-functional coordination
• Challenge in managing multiple product lines due to separation of operations
and marketing in different departments
• Since only the chief executive officer is responsible for profits, such a
structure is favoured only when centralized coordination and control of
various activities is required.
 Structure of Global Organization

4. Global product structure

Under global product structure, the corporate product division, is given
worldwide responsibility for the product growth.
The heads of product divisions do receive internal functional support
associated with the product from all other divisions, such as operations,
finance, marketing, and human resources. They also enjoy considerable
autonomy with authority to take important decisions and operate as profit
centres.
 Structure of Global Organization

5. Global Geographic Structure:

Under the global geographic structure, a firm’s global operations are
organized on the basis of geographic regions. It is generally used by
companies with mature businesses and narrow product lines. It allows the
independent heads of various geographical subsidiaries to focus on the
local market requirements, monitor environmental changes, and respond
quickly and effectively.
 Structure of Global Organization

6. Global Matrix Structure:

It is an integrated organizational structure, which super-imposes on each
other more than one dimension. The global matrix structure might consist
of product divisions intersecting with various geographical areas or
functional divisions. Unlike functional, geographical, or product division
structures, the matrix structure shares joint control over firm’s various
functional activities.
 Structure of Global Organization

7. Transnational Network Structure:

Such a globally integrated structure represents the ultimate form of an
earth-spanning organization, which eliminates the meaning of two or three
matrix dimensions. It encompasses elements of function, product, and
geographic designs while relying upon a network arrangement to link
worldwide subsidiaries
Emerging trends in Employee Relations and Employee involvement

Centralization of the ER function: ER has traditionally been organized

using one of the three models – decentralized, centralized, and mixed.
Centralized design refers to an ER team that is responsible for managing
employee relations issues and conducting investigations across the
organization. The team does not have to be geographically centralized. The
mixed ER model relies on a centralized team for managing some or most of
the employee relations cases and investigations with field representatives
(HR professionals) to manage some employee relations issues. In the
decentralized model, employee relations issues are managed within
specific functions or verticals by ER and HR professionals. A recent survey
by HR Acuity suggests a shift towards the centralization of the ER function
Emerging trends in Employee Relations and Employee involvement

An increasing focus on metrics and analytics: Like other HR functions, ER is

also becoming more data-driven and outcome driven. Organizations are
increasingly focusing on cost, root cause, and tracking metrics to drive
continuous improvement. By analyzing key trends, ER teams can also benefit
from significant cost savings and determine the actual cost of grievances and
litigation.
Workplace safety will be in the spotlight: 2017 and 2018 brought to light
numerous new allegations of sexual harassment in the workplace. The #MeToo
movement gathered momentum and raised uncomfortable questions about ER
practices in the organizations affected. ER professionals could expect more
employees to open up and report sexual misconduct and be ready to act in
anticipating employees’ public allegations. Building awareness of anti-
harassment laws isn’t going to be enough, ER professionals will need to
proactively create an environment in which all employees feel safe.
Trends in Employee Relations

• Trade union decline

• The most striking of changes that has been seen, is the lessening in the number of people
who join the trade unions. Even if these people join, they do not take part in the activities
of these unions. In the United Kingdom, the number of memberships had reached its
pinnacle in the year 1979. It was seen that more than 13 million people, which is roughly
58% of all employees had opted for being member of the unions for trade. In the years
that follow, there has been a decrease in the numbers continuously for every year. The
older members of the unions have retired, and new people have not substituted them. In
the year 2002, the membership was seen to be standing at just 7.3 million. In the most
recent times, there has been some decrease in the deterioration of numbers. Some
unions have also claimed that they have seen some increase in membership. This has
happened as more number of people has become a part of the workforce. However the
density of the trade union has kept decreasing for the past two and half decades now.
Trends in Employee Relations

• Window on practice
The trade unions mainly face problems in getting members from places
which are also called dispersed sectors. Here actually the different
employees lay scattered in small places of work throughout the entire
country. The people are seen working in quite small teams which can
even include less than six people. Hence the traditional approach of
unions which included communicating from a higher authority to
people such as stewards from shops is not quite practical. Hence
different new methods and technologies are required to be used such
as SMSs sent from phones and alerting these people.
Trends in Employee Relations

• Collective bargaining and industrial action

One of the major effects which was felt after the decline in number of
members in the union, was a continued decrease in the number of
people whose terms and conditions for a particular job was set
according to collective bargaining. In this particular segment too lots of
lots of changes have occurred. In the present times, it has been
observed that people have moved on from a position where many
members worked in companies having proper trade unions to places
where most people were not working in them anymore.
Convergence and divergence in personal management in developed and
developing economies

Convergence
• The convergence theory in HRM can also be referred to as the Universalist theory which is
founded on the belief that certain best practices can yield excellent fruits if applied across
organisations in different countries.
• This theory was most dominant in the 1950s and 1960s in the developed world (Europe and
USA) with the thinking being that universal application of good management practices was an
important factor in making societies to be more alike across national boundaries.
• Proponents of this theory advanced it in relation to an imminent acceleration in globalisation
where it was believed that as people continued to interact with each other more frequently
across national and cultural divide, there would emerge a global culture based on certain best
practices in business management and HRM.
• Even though this theoretical approach has been faulted for failing to recognise enduring cultural
differences, its proponents have sought to narrow down its application to business practices
while holding that managers across the world are more likely to have similar viewpoints and
attitudes. This justifies the convergence of management approaches. In other words, it is natural
that management practices will converge around certain established best practices
Convergence and divergence in personal management in developed and
developing economies

• Divergence
• Divergence theory emphasises the need to adopt different management
approaches depending on the circumstances and the goals of the
organisation.
• It can be explained using two theories: the cultural theory and the
institutional theory. The two theories also represent the driving factors
behind this theory.
• The divergence theorists in HRM practice hold that there is no ideal
approach to management for all circumstances and it is therefore
important to embrace agility and modify systems to suit different
circumstances in order to yield the desired results. This is consistent
with the contingency theory of management.
To understand the influence of culture on
HRM practices, a comparison is made
between the UK and the Chinese culture. (pl
refer to the word document)